Friday, April 21, 2017

Natural Gas: EIA Weekly Supply/Demand Report

Front futures up 1.9 cents at 3.1780.
The price at the time of posting the report last week: $3.1890.
To quote some insurance salesman from Omaha:

“Now I’m known as a long-term investor and a patient guy, but that is not my idea of a big move.”*-Warren Buffett

From the Energy Information Administration:

...Overview:

(For the Week Ending Wednesday, April 19, 2017)

Natural gas spot price movements around the United States were mixed
this report week (Wednesday, April 12 to Wednesday, April 19). The
Henry Hub spot price rose from $2.99 per million British thermal units
(MMBtu) last Wednesday to $3.12/MMBtu yesterday.

At the New York Mercantile Exchange (Nymex), the May 2017 contract price was flat Wednesday to Wednesday at $3.185/MMBtu.

Net injections to working gas totaled 54 Bcf for the week ending
April 14. Working natural gas stocks are 2,115 Bcf, which is 15% less
than the year-ago level and 15% more than the five-year (2012–16)
average for this week.

The natural gas plant liquids composite price at Mont Belvieu,
Texas, rose by 13¢, averaging $6.50/MMBtu for the week ending April 19.
The price of natural gasoline and ethane both fell by 1%. The price of
propane, butane, and isobutane rose by 4%, 5%, and 3%, respectively.

According to Baker Hughes, for the week ending Friday, April 14, the
natural gas rig count decreased by 3 to 162. The number of oil-directed
rigs rose by 11 to 683. The total rig count increased by 8, and it now
stands at 847.

Prices/Supply/Demand:
Prices movements were mixed. This report week
(Wednesday, April 12 to Wednesday, April 19), the Henry Hub spot price
rose 13¢ from $2.99/MMBtu last Wednesday to $3.12/MMBtu yesterday. At
the Chicago Citygate, prices were unchanged from last Wednesday at
$2.96/MMBtu. Prices at PG&E Citygate in Northern California gained
3¢, up from $3.32/MMBtu last Wednesday to $3.35/MMBtu yesterday. The
price at SoCal Citygate decreased 5¢ from $3.25/MMBtu last Wednesday to
$3.20/MMBtu yesterday....
... The Nymex contract was flat. At the Nymex, the price
of the May 2017 contract was unchanged Wednesday to Wednesday at
$3.185/MMBtu. The price of the 12-month strip averaging the May 2017
through April 2018 futures contracts climbed 1¢ to $3.385/MMBtu.

Supply falls slightly. According to data from
PointLogic, the average total supply of natural gas fell by 1% compared
with the previous week. Dry natural gas production remained constant
week over week. Average net imports from Canada decreased by 5% from
last week.

Demand falls in residential/commercial sector. Total
U.S. consumption of natural gas fell by 6% compared with the previous
report week, according to data from PointLogic. Power burn climbed by 6%
week over week, and was the only sector where demand increased.
Industrial sector consumption decreased by 2% week over week. In the
residential and commercial sectors, consumption declined by 28%, as
temperatures exceeded seasonal norms in much of the nation. Natural gas
exports to Mexico decreased 24%, with maintenance on the NET Mexico
Pipeline continuing to restrict export flows....MUCH MORE

*Buffet's comment was in reference to this statistical oddity of a secular bear market: